Fast Forward: SAP’s Steve Singh on Automation, Business Without Borders
Steve Singh sold Concur to SAP for $8.3 billion. Now he’s leading the company into the cloud.
By Dan Costa
SAP’s Steve Singh, one of the most successful technology executives out there, founded Concur in 1993 and sold it to SAP two years ago for $8.3 billion. In our interview, he talks about AI, automation, and the future of travel technology.
Dan Costa: I want to get to your job titles, and I say titles because you have more than one. President of Business Networks and Applications for SAP, Executive Board Member of SAP SE, and the CEO and Chairman of Concur Technologies.
That was part of my signing onto SAP… I wanted a lot of titles.
Hopefully you get three salaries as well.
That part didn’t work out.
Let’s talk about Concur. This is a company you founded in 1993. I did some research. In 1993, that was when I was on AOL. AOL had just opened up the Internet for mainstream users through the birth of the modern Internet, and you were starting a technology travel company.
When we started Concur, the idea of the Internet, you’re right, was just coming into being. To be fair, our first version of Concur wasn’t even a client/server product. It was actually a shrink-wrapped piece of software that was really designed to solve a problem that I had. The previous company I was at … I started a little company and we ended up getting acquired by Symantec, and I was on the road for nine months, and so as a part of that acquisition, the CFO of Symantec said, “Hey look, you’ve got til the end of the week to file your expenses.”
I was stressed because I had about $150,000 of expenses outstanding, and so I went to Egghead, looked for some software, and there was nothing. So I’m filling out these Avery forms, and after that I decided: “Okay, this is a great opportunity to go automate a business process.” But we did it with shrink-wrapped software, and then there was a transformation into client/server and then another transformation into cloud.
So that simple process of encountering a problem and then creating a technical solution for it, sort of what you’ve been doing for the last 20 years.
Yeah, I kind of feel like I’ve stumbled through parts of my life. Look, you think about most innovation, it happens because there’s a need to solve a problem, and then if you’re passionate about solving that problem and if you’re passionate about creating something that’s sustainable then a lot of good things happen.
So, expense reports. People still hate doing their expense reports. It’s never a fun process but how has it changed from when you started to now?
Maybe I’ll just give you my impression not only of that era but where I think it’s going. Back when we started Concur, expense reports were all paper-based, and they were totally disconnected from the travel process, right? So for me, I’ve never taken a business trip for which there wasn’t an expense report, yet when you booked travel back in ’93, it was a, you pick up the phone and call your travel agent. Today obviously that world has changed, and so what we think is going to happen is over time, the very concept of an expense report will go away. It’ll all happen invisibly behind the scenes.
Think about payroll. We don’t interact with our payroll system. Really happy that we get a check every couple of weeks, but the reality is, the check’s automatically deposited in your bank, and I think the same process will happen to expense reporting. In fact, I would argue that two or three years from now, you’ll not only see integrated travel and expense, I think you’re going to see a digital version of credit. What will happen is that you’ll see credit cards, corporate cards that are actually integrated into your budget. You’ll be able to swipe on a card and say, “Hey, look, I want to file this transaction as related to my New York trip.” And as you swipe the card it automatically goes into the expense report, automatically gets paid and process, so you literally do nothing but take your trip.
The problem with expense reports, at least in our company, is that everything needs to be approved by a manager, and those sign-offs become almost inconsequential because you’re doing so many of them all the time.
Yeah, and so that’s why it’s just got to get integrated into how you work. In fact, I think that there’s a fundamental shift in the world around this concept that we call beyond boundaries, or business beyond boundaries, that basically says, “Look, the technology should shift and morph into how you work, not the other way around.” Too much of the technology being delivered today is a set of services that you have to go conform to, and the reality is that it’s a stepping stone to where I think the world will move.
A lot of these services, some of the best services, work really without your input. You don’t need to see how the back end is working, you just have a need, and then the service fills it.
Absolutely. Maybe very broadly, you saw the shift from mainframe computing to client/server and then naturally to cloud. I think there’s a next wave coming, and that’s the shift to microservices… For your audience, it’s perfect, but it’s a very technical way of looking at the world.
We should explain what a microservice is.
I think that the applications themselves are going to start to decompose. You started off … SAP, it was the leader in enterprise software. They delivered this big, gigantic, monolithic application that ran every part of your company. The reality is, as you move to cloud, these applications start to decompose into their component parts, and the reason they decomposed is that the individual or the customer say, “Look, I want better experiences in every part of this … My business application,” and so the whole reason why Concur exists, is because as cloud computing started to decompose these apps, we had a chance to come in and say, “We can deliver such incredible value here that you’ll pay to automate expense reporting because it’s just 10 times better than what you could do before.” Now you’re starting to see those apps even decompose further.
For example, when you and I decided, hey, look, let’s get together, there was an email that was sent from your office to mine, and in responding back to that… I literally responded back saying, “Hey, you know, love to see you, look forward to seeing you on Friday.” Because of the work we’re doing with Microsoft, that email picks up the fact that I’m traveling to New York, it automatically says, “You know what? I’m going to go ahead and book your travel,” and it calls services within Concur to book that travel. So… as a user I don’t go into Concur and use it, but the email itself understands that there’s a travel piece that is needed here. It’ll call the right service to book that travel, and that’s what I mean by microservices. All the applications will be broken into their component parts, and those parts will be used whenever it’s appropriate.
And it relies on an open system.
So, there used to be a model where you were a SAP business. You were big enough to bring in SAP and they would run your accounting, your payroll, your expenses, all these different things, and now it’s, “You know what? We’re just going to use this for expense reporting, we’re going to use this for accounting, we’re going to use this for payroll and it’s all going to work together.”
And the reality is that customers, whether you’re talking about individuals or companies, are demanding that. Look, you want your systems to be open. You want to be able to innovate on top of those environments, and that demand is what will drive the shift to open systems. But part of this is also that, look, there’s no way one company can solve all of these programs. As much as I love SAP and I think it’s got a tremendous opportunity to dominate in the enterprise market, even with 84,000 people, we can’t innovate at the level that our customers want, and so what do you do? Well, you open up the platform and allow everybody in the world to say, “I can add value on top of that platform.”
So, 21 years after you founded Concur, you sold it to SAP for $8.3 billion. You stayed on with SAP. I’m sure you did pretty well in that transaction, but you stayed with SAP, and it sounds like you’re enjoying yourself.
I am. At Concur, it was never about anything but I loved what I did, and I loved the people I worked with. I felt like I was solving a problem that was worthwhile solving, and SAP is a little bit of the same. The reality is, I took 5,000 people with me from Concur into SAP. They’re my friends and in many ways like family to me, but I’m also learning a ton at SAP. Managing a 5,000 person company, while challenging and interesting, is very different than being a part of the management team of an 84,000 person company, and so I’m learning skills that are new, and as long as it’s fun I’m going to enjoy it.
And your portfolio’s diversified a little bit too. You’re getting involved in the healthcare space now.
Yeah. I happen to run a group called Business Networks and Applications. It includes Concur, Ariba, Fieldglass, SuccessFactors, our SAP health platform, and also our business data network, so a lot of very diverse and interesting parts of it.
You used the phrase earlier, business without borders … When people hear that, they think, ‘Oh, he’s talking about globalization,’ but it’s different. It’s more than that.
Globalization is a part of it, but the reality is that what we mean by business beyond boundaries is that just the nature of how we work changes the way technology has to actually be delivered, and so I think that that example of the emails is an interesting one. I don’t want to go into applications to do my work. I want the application to figure out what I want to do and go do that for me.
It’s funny. If you count up how many applications we used just to set up this interview, it was Microsoft Office, it was Google Docs, it was Calendar, Concur wrapped into it, and none of that was intentional.
No, and so as technologists, if we do our jobs right, the reality is these applications start to act on data and they start to take actions on your behalf, so think about what’s happening with IOT [Internet of Things]. Sensors are being built into everything in the world. Those sensors gather data and they ought to be able to take action, so really simple example. If you’re Rio Tinto and you’ve got big, heavy equipment sitting in remote parts of the world, just imagine just replacing a tire on one of these big tractors. These tires are gargantuan tires. The replacement cost is not the issue. It’s when you replace it, how do you get that replacement tire to that remote location?
So what’s happening is these sensors are being built into tires, and they’re sending information and saying, “Hey, you know what? I’ve got three months of life left in the tire,” and so it’s integrated into the Ariba supply chain. Ariba’s saying, “Hey, you know what, Rio Tinto, I’m going to ship a tire to you because three months from now you’re going to need it,” so the applications are starting to use information and take actions on your behalf, and that’s where the world has to go.
Yeah, well, I think that’s a nice logical turn to automation. I’m going to read you something that you’ve written. Hopefully you still stand by it. ‘As we move forward in today’s digital economy, every single business process that can be automated will be automated. Every single process that can be connected will be connected, and when you connect those processes with intelligence, with an awareness of context, systems can start to work on your behalf in amazing ways.’ Is there where we are right now, where we’ve got the automation and now we’re starting to add the intelligence?
Yeah, I think that’s exactly where we’re going. Look, it’s going to have massive benefit for business, but it’s also going to have massive impact on our workforce. It’ll have a huge social impact in the world. When you think about what happens with AI being integrated into technology, there are huge chunks of … Let’s just take finance and accounting. There are huge chunks of the finance and accounting function that can be done without the human being involved. So the role of each individual in finance and accounting is going to change massively over the next, I’d say, five to 10 years.
So when you think about the shifts in jobs that’s happening in our economy, the jobs are not being lost to outsourcing to other parts of the world, they’re being lost to automation. And unfortunately, there’s massive benefit to automation, and business will always try to be more and more efficient, so the question is that as that shift continues, what do we do as a society to ensure that there’s an incredible opportunity for people?
I heard the example today that Ford was going to keep a plant in the United States that was a $700 million investment. There are going to be 700 jobs there, and 10 years ago there would have been 7,000 jobs, and 30 years ago there would have been even more than that, and it’s just something that’s not factored into our conversation.
Naturally. You look at even self-driving cars, right? Even though we’re not there today, look, in 10 years will we be there? Probably. Think about, just in our country, the number of people who make a living in taxis or in town cars or whatever it might be. That’s going to change, so we have to as a society thinks about what’s that impact and how do we help train every member of our community to do more and more valuable parts of work.
We’ve talked about drivers being replaced. We’ve talked about mid-level accounting people being replaced. When does this start to become real for the American people? When do they start to actually appreciate it and say, “Okay, we need to take action here”?
Now we’re getting a little bit more into the philosophical part of life, but I think one of the things that we can do a lot better job at in our country is massive investment in education. The way to prosperity is through education. I say this because, look, I was born in literally a mud house in a tiny village in India. The reason why I’m sitting here is because my father knew that his only chance at life was to have a great education and go seek opportunities in parts of the world where they existed. As the core functions of society become automated, the only way for individuals to thrive is to drive an investment in education that gives them a chance to do more valuable things.
So are you bullish on the fact that if we did raise education levels and we went to school longer and we got more specific training … We’ve talked about even programming itself. Everybody said programming used to be this thing that, as long as you could program you’d always have a job. Programming has been automated now.
Yeah, but there will be higher and higher value functions within programming, right? We’re not anywhere near done in that space. In fact, I think that we ought to be investing in STEM education all the way down to the kindergarten level. In fact, one of the things that came out of the SAP acquisition at Concur is that I had a chance to put together a small foundation. The foundation invests entirely in education, and for us, we’re focusing more on girls’ education but across the board in education, and so driving programming or coding classes into schools. In my view, is an excellent opportunity to give that next generation of our citizens an opportunity.
Artificial intelligence also plays into it. We talked about automation, but AI and machine learning is also driving a lot of these forces. Have you seen anything that you’ve been particularly impressed by, like this is an amazing development and it’s here today?
I still think we’re in the early stages of this, but you’re starting to see examples of where machine learning and artificial intelligence are improving the quality of the application. I think Google does an amazing job in this area. I think that SAP, while we do amazing work here, it hasn’t yet touched the customer, but in the next two or three years, you’re going to see that happen. So literally, our finance applications Concur, will have a set of AI built into it that will wipe out even some of the entry of expensive ports, so they’re starting to show up but I still think we’re two to five years away.
That’s not that long, though.
You should be planning for that. We should all be planning for that now.
Yeah, and look at … You and I, as we’ve grown up through this industry, we’ve seen sea changes in the industry, but look at a company like Netflix, right? It’s gone through two transformations in its 20-year history. It started off really as a DVD rental company, but today it’s producing its own content, so twice in its history, it’s transformed itself, and I think that rate of change is just accelerating, and so two to five years, that’s nothing. You’re going to see massive, massive changes.
Yeah. Netflix went from a disk company that would mail a product that relied on US mail to a streaming company, and then pivoted again to become a content company, and all the while charging seven to ten dollars a month.
And by the way, a lot of the stuff that Netflix delivers is based on technology that someone else built, so it’s sitting on top of AWS, but a lot of the micro-services that AWS delivers is driving Netflix. In fact, it’s interesting. As much as AWS supports the success of Netflix, it’s also using the same technology to deliver its own content, and so, in fact, Amazon Studios, right? It didn’t exist 10 years ago, but at the last Golden Globes, it had 11, 12 entries.
And it’s amazing if you look at how much money they’re pumping into content production, it’s more than the studios are, and Netflix’s pipeline … They’ve got a billion dollars worth of content in the pipeline that hasn’t even shown yet.
This is the kind of transformational opportunity that exists by taking technology, driving down to its component parts and making these services available to anybody in the world. What you’re going to see is how those services come together and the products are being delivered could be way beyond anything we imagined, and in my view, that’s the fun part of the opportunity in the next 10 years, but it’s also massive change. You look at just the music or movie industry, how much that’s changed. It’s just the beginning of change. The idea that talent can create its own content and distribute it and monetize it will forever change.
You’ve said if you ever left Concur, and now part of SAP, you might take a stab at running an alternative energy company. What particular segment, and would you be doing that for profit or for altruistic reasons?
As I’ve gotten older I’ve realized I don’t have enough experience to do that. I think that alternative energy is an area that we have to invest in for lots of reasons, not the least of which is it’s a requirement, given how much we consume, from an energy perspective, that we have to find ways to actually consume it in a … Not just in a better for our environment, but frankly in a renewable model. Look, I still would love to do something of that nature, but I’m also happy to invest in companies that do that. I think what Tesla’s doing with battery technology is amazing, and frankly that’s the first part of the problem to solve.
Even if we could have a solar based set of power services, you still have to be able to store that energy, and so that problem is an important problem to solve.
That’s the thing that, when we talk about alternative energy sources, it’s one thing to talk about moving to solar from oil, but you need all the infrastructure to support. Moving this energy around, storing it, it’s the battery problem Tesla’s made great cars , but they’re also working on building the infrastructure so that you can recharge in various locations.
Yeah. In fact, we run a small charity in India. It’s a girls school and it’s a remote village, and so power is not something you can always rely on, and so we actally bought the Tesla power wall. It’s being installed right now in that school. One of the great things about that village is it gets plenty of sunshine, so we’ve got solar panels that are charging that battery. Our hope is that once that’s done, you’ll be able to run the school with constant stream of power all day long, where today, it’s normal to see every five or six hours, the power just shut down for another five or six hours.
I think that’s an interesting perspective too because, in the US, we tend to think of ourselves and look at what’s happened in the United States and the effect of technology on the economy. But when you step back and look at the standard living globally, a billion people have left poverty in the last ten years. That’s incredible.
Yeah. There are so many areas we could go with that, right? Most of the human population doesn’t live at the levels that we live at. To be fair, there’s another part of this. Half the human population really doesn’t have the same opportunity that the other half does. If you think about the opportunity for women, it starts with an investment in education, and from there the chance to engage across the workforce. These are things that you and I have enjoyed for our entire lives.
One of the things as we were talking, we talked a lot about Concur and how you founded that company. Before that, you were an employee at Apple Computer. What was that like?
First of all, it was random luck that I got to be a part of Apple. I happened to be sitting in a bar and chatting with a guy that worked there, and he was working on a complex problem…
It’s a little harder to get a job at Apple now.
Yeah, yeah, and I happened to be programming at the University of Michigan on a visa, and he said, “Hey, look, why don’t you come on out and meet the team?” and it led to a job at Apple. This was back when Steve Jobs was running the company. Very different era… I was totally blown away by the innovation that they were driving and how forward thinking the company was even back then. So, look, a lot of life is happenstance and I happened to run into an incredible individual that gave me a chance at a great life.
Concur has worked out pretty well for you, but have you ever thought about what would have happened if you stayed at Apple and you spent 23 years working at Apple?
Yeah. I had an entrepreneurial bug that was there even in the Apple days, and for me, there’s never going to be a time where I don’t want to create new things, and so that’s part of what gets me charged up. That’s part of what I feel like I can add value to, so I love the path that I’ve been able to take, been fortunate enough to take.
Let’s get to my closing questions. What are you most concerned about regarding technological development in the future? What keeps you up at night? What do you think is a big problem we should be addressing, and we’re not?
I think the bigger problem is the impact of technology on society. From a jobs perspective, certainly, and I think we as a society have to think about, as automation drives jobs out, what do we do to help our citizens continue to thrive? I believe that this is an area that public policy has been to focus on really. I think today perhaps we’re not as focused on it as we should be, and I do not concern myself with democrats or republicans. I believe that the reality is this is an area that we as a country have to go spend time on, and there are basic services that we need to deliver. It’s education, it’s healthcare, and frankly just core opportunity for every member of our society.
On the flip side, what are you most optimistic about, and this could be a broader technological trend, or it could be a new gadget that you just brought home and you’re like, “This changed my life and I can’t live without it.”
I’m an investor in a company called Center ID, and I love what they’re doing. They’re creating a digital credit card that has budgeting software that comes with it. It’s an opportunity to change the corporate credit card market, and so on a more microscopic basis I’m excited about that, but look, broadly I think technologically, as much as it has potential negative impact on society also has a massive positive impact, right?
Think about what technology can drive into the healthcare arena. If you think about cancer treatments today, the vast majority of cancer treatment, in fact, all of it, is based on an average that every demographic is an average white man, age 55, right?
Because all the studies were done on that demographic group of patients.
Steve Singh: Yeah, so if I’m unfortunate enough to have that problem, I’ve got some issues I have to deal with outside of cancer. I think as we bring technology to bear on what are fundamentally disparate data sets, I believe that we can drive a level of personalization in medicine that will radically improve the quality of health, and so there’s tons and tons of benefit from technology that I’m actually very excited about.
Now how can people find you online, follow what SAP’s doing, get in touch with you?
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Originally published at //www.pcmag.com/article/351723/fast-forward-saps-steve-singh-on-automation-business-with.